Ant Financial-backed mobile payment firm Mynt seeks Philippine bank partners to grow microloans business
- The fintech firm wants to open its mobile wallet platform to banks and enlist them to its microloans service
Mynt, the Philippine mobile payment operator part-owned by Ant Financial, is expanding its microloans offering by opening up its platform to bank partners.
The move aims to use the risk-management capability of its Chinese shareholder to diversify into the internet finance marketplace.
Mynt’s chief executive, Anthony Thomas, said the purchase of a 45 per cent stake by Ant Financial last year has equipped the Manila-based firm with the ability to seek out new revenue sources away from the mobile payment and remittance services run by its licensed operating arm, GCash.
Thomas said GCash has had discussions with banks in the Philippines about potentially inviting them to also become lenders on the GCash platform.
Launched in April, GCredit is a credit line available to users of the GCash e-wallet app, giving them an additional balance that can be spent on paying bills and shopping offline. Users are required to repay the credit, at a maximum interest rate of 5 per cent, within 15 days of the billing date.
“We want to increase our cooperation with banks. Ultimately, I don’t believe that Mynt has to be the only lender for GCredit, but GCash can be more of a marketplace on which other lenders could also [provide credit lines],” said Thomas.
The availability of GCredit is dependent on a “GScore” that rates the user’s eligibility based on his payment behaviour. Thomas said in expanding the company’s microloans businesses, Mynt has benefited from Alibaba’s direct involvement in its risk management.
Ant Financial is a unit of e-commerce giant Alibaba, owner of the South China Morning Post.
“As the demand for Gcredit grows, the data we capture will grow from merely analysing a user’s payment risk to also analysing his credit risks. While we have our own data science capability, we believe we can learn from the big data and risk management capability of Ant Financial, which has run it on a much larger scale elsewhere,” said Thomas.
Ant Financial started its internet finance business on its home turf on the back of its third-party payment network, Alipay. Although competition has been intense both in China and abroad, Ant Financial has been able to leverage Alipay’s edge in technology and risk management to expand its business globally, making investments in countries such as India, Bangladesh, South Korea, Pakistan and others in recent year.
In the Philippines, two out of three people do not have access to a bank account, and credit card penetration remains below 5 per cent.
But the country’s high mobile penetration rate means non-bank companies like Mynt have been able to offer basic payment and microloan services, essentially replacing a role traditionally played by banks.
Last year Ant Financial and listed conglomerate Ayala Corp bought 45 per cent and 10 per cent stakes respectively in Mynt, which had been fully owned by Globe Telecom. Their investment diluted Globe Telecom’s share to 45 per cent.
The Philippines’ mobile wallet and internet payment sector has attracted investment from some big names previously. In October, Tencent and the American buyout firm KKR led other investors in subscribing to a “substantial minority stake” in the mobile payment and lending platform Voyager Innovations, for US$175 million.
A recent study by consultancy firm Oliver Wyman said mobile wallet is expected to account for 6 per cent of the country’s consumer payments by value – estimated at US$362 billion – by 2022.